Bob Sundberg Building Control Solutions Commercial Products Market Manager

Home and Building Control Honeywell, Inc. MN10-2471 1985 Douglas Drive North Golden Valley, Minnesota Fax: 612-954-4411 Telephone: 763-954-4461 E-Mail: bob.sundberg@honeywell.com

Date: May 30, 2003

Dear: CT Governor Rowland; CT Senator Kevin Sullivan; CT Representative Moira Lyons; CT Senator Martin Looney; CT Representative James Amann; CT Senator Toni Harp; CT Repesentative William Dyson; CT Senator Eileen Daily; CT Representative Robert Ward

First of all, I'll inform you that I am a product development manager at Honeywell Building Control Solutions home office in Golden Valley, Minnesota. A very important part of our team's work is to support innovative and effective utility market transformation programs. Progams like the Residential Air Conditioning Tune-Up program that just recently announced that its funding and all funding for state Energy Efficiency programs had been terminated. Programs designed to:

· Postpone or avoid extremely expensive additional electrical transmission infrastructure and demand side control cost burdens for citizens of Connecticut and other states --- we're talking tens of $millions,

· Voluntary programs that have been estimated to return up to $4 for every $1 invested each year,

· Maintained and grown jobs, raised wages, improved technology skill levels in workers,

· PRODUCED INCREASED TAXES FOR STATE GOVERNMENTS THROUGH STIMULATION OF EQUIPMENT AND SERVICE SALES

· Stabilized business and employment in very tough economic times AND

· Saved citizens and businesses $100s to $10000s each in avoiding excessive energy costs to stimulate consumer spending and business investment

I cannot speak from experience about all of the proposed uses of the Conservation Fund, but I will share with you my assessment of ONE specific program as an example. If any programs were anywhere near this successful at meeting their goals, it is a grave error to terminate those programs, especially when your state appears to be on the brink of its own "Energy Crisis." The hidden penalty for your citizens, if the Conservation Funds are not reinstated, is immediately higher energy prices, wasted energy dollars and decades of burden from imposed electrical transmission costs and crisis energy shortfall measures.

I've been involved directly with a small initial pilot to transform residential air conditioning service from the manual and "sloppy" tune-ups of the past to high tech and highly effective and precise "measureable" tune-ups. The "Residential A/C Tune-Up program was considered for years by your own Connecticut Light and Power and United Illumination energy efficiency staffs. From the perspective of our team, it may be the most effective program we've every supported. It's also very time-sensitive. Early season tune-ups are needed to maximize THIS season's energy savings and extend equipment life. The program is designed and very effective at:

· Convincing a significant portion of large and small heating, ventilating and air conditioning (HVAC) contractors to participate over --- 20%

· Convincing 36% of these firms to make a significant investment of $2500 for EVERY staff technician to totally change the way they evaluate and service air conditioning systems utilizing a new technology. FOR THE FIRST TIME TO ACTUALLY MEASURE PERFORMANCE EFFICIENCY "REAL TIME" FOR BEFORE AND AFTER SERVICE EVALUATION,

· Convincing 61% of these firms to outfit 50% or more of their staffs with this new technology, most of whom had never used hand-held computers in their work before,

· Mobilizing 33 firms in less than 4 weeks to train over 110 staff to properly apply this new technology in "minutes" for more precise A/C performance evaluation and prepared their staff for

· Supplying Connecticut citizens with "proof" of measured performance improvement of 20%, 30%, 40% or more with their existing A/C systems and

· Where appropriate, proposing an equipment upgrade from older systems with much lower SEER ratings where major and expensive repairs were required to higher SEER, more efficient new A/C systems.

This program pilot, if approved and extended into a full 2004 program, has the potential to "duty cycle" all participating residential AND commercial air conditioning packaged units "OFF" approximately 25% of the time during PEAK electrical demand. Air conditioning is THE PRIMARY PEAK LOAD !! Without new power generation in the region. Without new and taller and much, much, more expensive transmission towers. Without extremely costly "wireless" radio control relay units being installed at each air conditioning unit to "manual" duty cycle units.

Along with redirecting the Conservation Funds as a whole, your actions will destroy the efforts of hardworking, dedicated and "talented" staff to introduce one of the most effective "push/pull" strategy programs in the United States. More effective than Wisconsin Focus on Energy or the Silicon Valley Authority or the California Energy Commission's big three utility programs or any of the Northwest Energy Efficiency Alliance programs to 1) get the contractor community involved and committed, 2) launch a "public awareness campaign" second to none (this typically takes 3-5 years or never, not 1 to 2 years) and offer the promise of virutually eliminating past shoddy A/C service practices as contractors share performance information collection directly from the owner's A/C units -- tamper-proof information!

I don't know how long, if ever, it will take to recover from the elimination of Energy Efficiency programs. Prune ineffective ones, replicate and strongly support the best, but DON'T, DON'T JUST ELIMINATE ALL FUNDING TO ALL PROGRAMS or your citizens will pay the price and blame their government for extraordinarily short-sighted judgement and action.

I write to you after hearing and reading about the turmoil to balance your state's budget deficit and fiscal crisis. Many states are facing similar shortfalls. Your state's 20+ year efforts in Energy Efficiency programs have successfully avoided a major crisis --- energy shortfalls that can paralyze whole regions and also the extreme increases in utility rates experienced by California two years ago, much of which remains today at $0.12 to $0.18 plus demand charge rates. It appears to those of us in the business community who support the state energy efficiency efforts that your actions to seize Conservation Fund monies is action taken to "appear" to avoid one major problem --- the immediate deficit --- in exchange for creating a much larger problem and longer range crisis. "Appearing" to reapply $70+M in conservation funds to solve a problem.

Then, there are all the issues of the funds being collected for a stated purpose -- energy savings -- but, now being diverted for another -- short-term plugging the dike. Non-profits being "taxed." An energy fund being redefined as a "true tax." I've read opionions about whether these actions are legal or not. I'm not an attorney to judge. But, the actions destroy confidence in government. If any "legal" actions are taken, the result will effectively tie up the funds and they won't accomplish their goal......and your next brown out is right around the corner !!! July/August!!

We strongly urge you to reconsider and reverse actions to raid the Conservation and Load Management Funds. Reinstate the Fund and attack the sources of the deficit problems more directly. At the very least, evaluate which programs are deemed most effective and only reduce or eliminate those never put into action or those which have not accomplished their goals. The Yale study seems to have revealed that the raid on the Conservation and Load Management Fund will yield less than 25% of the stated $85M after "real" other losses of state taxes are considered. And, the loss of those taxes will go far beyond the "two year" window you've defined.

To those of us in the business community, it looks like "poor business judgement" which sounds well intentioned (to avoid raising taxes???), but will ultimately harm your citizens far more than attacking the real culprits of the unbalanced budged. We strongly, strongly urge you to reinstate the Fund. Or you have lost the confidence of this firm and many others to support your state for a long time. We'll be forced to divert our investments and efforts to subsidize effective programs elsewhere.

I would like to ask each of you to individually reply to our letter. Not a canned aid's response. Your response, either attempting to justify your actions OR your consideration and actions to change the course of the action to reinstate the Conservation Funds.

Thank you,

Sincerely,

Bob Sundberg

Honeywell International Building Control Products MN10-2471
1985 Douglas Dr North
Golden Valley, MN 55422

(763) 954-4461 Direct; mobile: 763_234_1145: (763) 954-4411 Fax

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